Should You Buy a Car With a Salvage Title?

If you are looking to get a great deal on a used car, you might have considered buying a car with a salvage title.

Cars with salvage titles are cheaper than cars with clean titles. But before you decide on your purchase, you should know the risks and rewards that come with buying these types of cars. Cars with salvage titles are the “fool’s gold” of the used car industry. If you are very lucky, you might land a great deal that saves you thousands of dollars! But before getting too excited about this ideal scenario, we are going to show you:

• What a salvage title means and how cars get this designation

• The risks and setbacks they can cause you

• How to buy a vehicle without risking yourself future headaches and costs.

What is a Salvage Title?

A salvage title is issued when a car is considered a “distressed vehicle.” The rules under which a car can be considered a “distressed vehicle” differ depending on which state you live in. In Michigan, for example, when one of the major components of a car has been damaged, stolen, or destroyed, an insurance company will issue a salvage title if the damage is estimated to be between 75 and 91 percent of the car’s pre-damage value.

When this happens, the car will then be sold at an auction or by various other methods. Before this car can get back on the road, the purchaser must repair it, and a specially-trained police officer must approve it. Don’t be fooled, this check has nothing to do with the quality of a vehicle.

How Will a Salvage Title Affect You?

When the police officer checks the car with a salvage title, it only takes about an hour or two. First, the officer will check if the proper paperwork has been filed. This is to ensure that all the parts were legally purchased and that the damaged components have been replaced.

According to Officer Swanson, a Michigan State Police Trooper who checks salvage vehicles before certifying them as rebuilt, “I’m not there to see if the car is safe to drive. All I’m doing, basically, is facilitating an inspection that shows that the parts that are on it aren’t stolen.”

After this check, the car could still have missing airbags, a crooked frame, or many other problems which would make the vehicle dangerous and unsellable.

In short, salvage cars come with too much risk. If you still want to buy one, you should bring a trusted mechanic who can check EVERYTHING. But still, you will be at risk for the cost of future repairs and, if you want to sell your car in the future, your car may not be very valuable. Dealerships rarely accept salvage titles and Kelly Blue Book values don’t apply to salvage vehicles. This makes it hard to determine the true value of your car and to come to an agreement with a buyer.

One more thing: insurance companies might not insure your salvage vehicle, and if they do, you will likely pay a higher premium. This will offset any savings you get from buying a cheaper, salvage vehicle.

How To Find Out if a Car is a Salvage

Get a vehicle history report from CarFax. This company receives data from all United States and Canadian motor vehicle agencies. This all but guarantees to uncover a salvage title if the car has one. Here are the costs:

Single report: $39.99

Unlimited reports for 60 days: $54.99

We highly recommend using CarFax during your car search. We understand that it is an extra cost, but it could save you thousands of dollars in the future.

Ask the seller for repair and accident records. When buying a used car, you want to have a deep understanding of the car’s repair history. Does it constantly need repairs? Have there been hefty repair costs that indicate the car has been in a major accident? Also, a car owner with detailed maintenance records is likely more trustworthy than someone who has no records at all.

Check the title. The title should indicate whether or not the car is a salvage. As well, you should check if your state prints salvage titles on different colored paper. Keep in mind, while this is rare, a title might not indicate if a car is a salvage vehicle at all. Use multiple methods to verify a car’s condition and title designation.

Get a trusted mechanic to check the car. This should be done for all car purchases. You never know if a dealership is skimping on replacing brake fluid just to leave the cost to you later. Also, if you are buying a hybrid, there have been cases of dealers selling cars with batteries that are only a month out from needing to be replaced (a cost between $1,500 – $3,500). Get the car checked!

What to Buy Instead of a Salvage Title?

Buy a car with a clean title. A clean title is safest because it means the car has been driven safely (no major accidents). Also, a clean title guarantees that you can at least get insured for the price of your vehicle.

Watch out for vehicles that have had many owners. Unless it is an exotic car which people like to trade around for joy rides, a car with multiple owners over a short time period should raise red flags.

And again, try to find vehicles with repair records, and get it checked by a trusted mechanic.

How to Avoid All of these Problems and Get a Good Deal

If you get lucky and have a great mechanic for a friend, maybe a salvage title can save you money. In most scenarios though, you will be at risk for high repair costs and might buy a vehicle that will fail you much sooner than expected.

Most people don’t have the resources or the knowledge to buy a salvage vehicle. And to be honest, most knowledgeable car buyers avoid salvage titles because they are not worth the risk.

In this article, we have recommended several ways to make sure you safely buy a used car:

• Get your car checked by a mechanic.
• Check the CarFax vehicle history.
• Check the title to see if it is a salvage title.

Good news, you don’t have to do all of this. At TRED, we commit to a 150-point inspection on all vehicles listed on our website. We check the history of each vehicle to guarantee that it has been driven safely and hasn’t been designated as a salvage vehicle. Best of all, we manage the paperwork and guarantee safe transactions between sellers and buyers through financial and identity fraud protocols.

That means you can buy a safe vehicle that saves you money in the future. No crazy repair bills that were unexpected! If that sounds good to you, then check our listings of used cars by clicking here.